Jet Airways' lenders hope bidding process can save airline

Creditors of India's beleaguered Jet Airways say they are reasonably hopeful that a bidding process with potential investors for a controlling stake in the airline will save the company

NEW DELHI — Creditors of India's beleaguered Jet Airways said they were "reasonably hopeful" that a bidding process with potential investors for a controlling stake in the airline would save the company, while airline employees rallied in New Delhi and Mumbai for a government rescue.

A consortium of 26 lenders led by the State Bank of India released a statement Thursday following the cash-starved carrier's decision late Wednesday to suspend flight operations.

Jet Airways, once India's largest airline, was down to seven aircraft flying only domestic routes earlier this week.

"Since no emergency funding from the lenders or any other source of funding was forthcoming, it would therefore not have been possible for us to pay for fuel or other critical services to keep the operations going," the airline's chief executive said in a statement published on the company's website.

Zoya Shaikh, a 23-year-old Jet Airways airport agent, said at a gathering of employees outside the airline's Mumbai headquarters on Thursday that she was still waiting for this month's salary.

"There is no clear idea of what is happening. We have been told by the airline management to wait for what the bidders plan to do," she said.

Jet Airways pilots have complained that they haven't been paid in four months, and that more than 20,000 jobs are at stake.

"My kids are asking for medicine. Who do we go to and beg? If we don't ask the government, who do we ask?" Rajender Kumar, a Jet Airways baggage handler, cried.

Shares in the Mumbai-based airline were down 32.7% on the Bombay Stock Exchange at Thursday's close.

Travel agents in New Delhi said Jet Airways' grounding was affecting prices and availability of flights in and outside of India.

Jyoti Chopra of Sadhana Tours India said there were no seats available on any of the five daily direct flights from New Delhi to London Heathrow anytime in the next six days. One-way flights with one or more stops were selling for around 70,000 rupees ($1,006), about 43% higher than a week ago.

"If a passenger has something urgent, I don't know how they will do it," she said.

A round-trip flight from New Delhi to Thiruvananthapuram, a city in Kerala state in southern India, a week ago would have cost about 14,000 rupees ($201) but showed at 35,000 rupees ($503) on Thursday, Chopra said.

On Tuesday, former Jet Airways Chairman Naresh Goyal, who founded the airline in 1992, withdrew plans to bid for a controlling stake in the company, according to aviation consultant Mark Martin.

It was not immediately clear who else might bid for the company. Etihad Aviation Group purchased a 24% stake in 2013.

"Finding new investors was always going to be a tall order for Jet Airways," said Loizos Heracleous, an aviation expert at Warwick Business School in Britain. "Increases in industry profitability after 2011 were aided by lower fuel prices. With fuel prices on an upward trend since 2016, the performance of some airlines has taken a hit."

The airline had 119 planes on Dec. 31, when it first defaulted on some of its more than $1 billion in debt. This week, its fleet was down to 14 planes after some lessors grounded aircraft for lack of payment.

The airline reported a net loss in the quarter that ended in December of 5.8 billion rupees, about $83 million.

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AP journalists Shonal Ganguly in New Delhi and Rafiq Maqbool in Mumbai contributed to this report.